Tech Spheres

Discussion of Web 2.0 Business Strategies (SaaS, PaaS, Strategy, Enterprise, Small Business, Flex)

Taking a Stab at a Visual Formula for Community Success

Posted by Alex Chriss on December 1, 2008


In thinking through the strategy for the Intuit Partner Platform, I’m wondering if there are specific components or theories that if put together in the correct way (and executed on well), can help create a really successful venture in the web 2.0 world – or more specifically a vibrant community. The graphic above is a quick sketch to try and put together some basic theories.  It’s not a mathematical equation but simply a visual way to think through how all this “Stuff” comes together – (The companies listed are just examples of compnents…) So, what are the components we’re thinking about? 

Channel/Brand/Reach:  Our favorite stories are those of startups that started from zero users and grew to world dominance.  But that’s very hard and very uncommon.  Communities that can leverage existing channels and/or user bases to get things kick-started, have a much better chance at success.  As Ben Kepes said to me “the problem with community created content is that the community needs to come first”! 

Contribution System:  Most basically, this refers to enabling a community of users/developers/?? to engage, absorb, and if interested, contribute back to the product/service.  By enabling contribution, you are tapping into a collective wisdom far greater than any one firm/person could produce.  If done correctly, you’re also entrusting ownership of the community to the users themselves.  That ownership is what drives true engagement.  There’s a simple 90-9-1 theory that talks about what the breakdown of your community actually does – This is a great start, but what’s more important, is that the entire community is “engaged.”  An engaged user may not actually contribute perceived value to the community (i.e. a Wikipedia entry) but if they tell a few friends, who tell a few friends, who tell a few friends, then… 

Net-Promoter & Viral growth: Two concepts that bring you to the same place – how do you get more people to your community. I’d argue that word of mouth (in its many incarnations, txt, twitter, facebook, etc.) is still the fastest and most powerful way to grow a business.  By creating an engaged network, and making it insanely easy to share the product or service, you can rapidly expand growth.  

Network Effect: Lot’s of users do not give you a network effect…but if each additional user adds value to the overall system – then you’re in business.  Tim O’Reilly also breaks down two different types: endogamous and exogamous, both of which I believe are critically important.  Basically, communities have to figure out a what to harness the power of their numbers to add value to the entire network.  

Data: The real value in all of these people doing and contributing “stuff”, is the data they create.  Think Wikipedia, or Google, or Facebook, or Windows – The whole point of creating a growing network effect is to tap in to massive data – but the secret is to make it accessible and valuable  on both a macro and micro level.  Networks work because they evolve quickly based on collective contribution but also because the evolution is valuable to ME at the individual level. Companies that can increase the iterative speed between macro-evolution and micro-relevance can become very interesting.  As Tim O’Reilly (who is obviously way ahead of me here) said a year ago, “As the applications become apparent, the data will be valuable in new ways, and the company with the most data wins.”

Obviously you need a compelling idea/service/product, but does this make sense as an overall way to think about growing a community?  What’s missing?  What doesn’t make sense?  


One Response to “Taking a Stab at a Visual Formula for Community Success”

  1. Ben Kepes said

    Alex – thanks for the link love. I reckon you have all the bases covered… except for one.

    Can a true community be built atop one vendors location. Of put more logically, does a community site have to be neutral and independent to succeed? Clearly there are a bunch of successful community plays that are not neutral, but as the offerings for prospective community members start to fill out, neutrality will start to become the qualitative differentiator.

    Of course there’s stuff vendors can do to improve the success of their own community offerings….

    Thoughts anyone?

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